Sharjah Islamic Bank (SIB) recorded an increase of 26.7 per cent in net profit reaching at Dh514.1 million for the year ended December 31, 2021, compared to Dh405.8 million for the same period in 2020.
The bank also reported an increase in operating profits by 21.9 per cent, reaching Dh850.7 million for the year of 2021, compared to Dh697.7 million in the previous year.
Despite the partial recovery from the repercussions of the Covid-19 pandemic, the bank continued its hedging policy to face the challenges resulting from the operational conditions that the global economy is still going through. Consequently, the bank has reported Dh244.5 million in the net impairment provisions, which has decreased by Dh11.3 million, compared to Dh255.8 million for the previous year.
The growth of the bank’s net profit indicates strong performance across all the business units of the bank. As a result, the net income from financing and investment products increased by 12.4 per cent, or Dh120.3 million, to reach Dh1.1 billion for the year of 2021, compared to Dh1.0 billion for the same period of 2020. While net fees, commissions and other income increased by 16.8 per cent to reach Dh333.2 million, compared to Dh285.2 million for the same period of 2020.
SIB maintained general and administrative expenses at the same level with a slight change compared to previous year amounting Dh576.8 million for the year ended 2021 and Dh561.5 million for the year ended 2020.
The statement of financial position of the bank showed an increase in total assets by 2.5 per cent to reach Dh55 billion as at December 31, 2021, compared to Dh53.6 billion as at December 31, 2020.
The bank continues to maintain a strong liquidity ratio for future opportunities, as it reached Dh14.3 billion, or 26.1 per cent to the total assets, compared to Dh11.2 billion, or 20.9 per cent of the total assets at the end of the previous year. Financing to deposits ratio reached 75.4 per cent, which reflects the strength and stability of liquidity position of the bank.
Sukuk payable decreased by Dh1.8 billion and stands at Dh3.7 billion as at December 31, 2021 as against Dh5.5 billion as at December 31, 2020, due to the repayment of $500.0 million in the third quarter through the bank’s own sources, evidencing strong liquidly position.
The bank was able to attract a larger volume of customer deposits during 2021, as deposits significantly increased by 14.5 per cent or Dh4.9 billion, bringing the total deposits to Dh38.5 billion, compared to Dh33.6 billion as at December 31, 2020.
Sharjah Islamic Bank has a strong capital base, as the total shareholders’ equity at the end of September 2021 amounts to Dh7.7 billion, which represents 16.3 per cent of the bank’s total assets. Thus, the bank maintains a high capital adequacy ratio in accordance with Basel III at 20.84 per cent.
The profitability of the bank has an improvement, whereas rate of return on average assets and average equity increases significantly as well, at 0.95 per cent and 6.7 per cent annualized, respectively, compared to 0.81 per cent and 5.35 per cent at the end of the previous period. During its meeting, the bank’s board of directors proposed a cash dividend of eight per cent, provided that it is put to a vote in the general assembly meeting.
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